When you are underwriting a small multifamily deal, for example, 4 to 10 units or more, in a tertiary market with C & B-class properties, what is the best way to determine a safe cap rate for your subject property?

I'd typically just look at comps in the area and list accordingly, but I'm curious to see if others are using specific tools and/or metrics to determine rental pricing.

Hi Friends,I am looking to flip in the Tampa area and I'm in touch with a few Wholesalers and Realtors there.I have received multiple properties from them; however, I am always concerned that their ARVs are inflated, which will leave me in the red.How do you determine correct ARVs when you are not physically present and can't pull your own comps from the MLS?

First, you need to determine what is the demand in that area.

Rent divided by PITIA determines whether the deal qualifies.But that is only part of the equation.Credit score directly impacts:Interest ratePointsMax LTVCash-out eligibilityReserve requirementsEvery DSCR lender has minimum FICO requirements.

What metrics do you use to determine if it is a good deal or not?

I would have to pay for some legal expenses for deed work, etc and relator fee so,I would net around $55k .trying to determine what makes most long term financial sense. 

Some sellers refuse to understand that when inventory is up in a market, prices decrease. Overpaying for a home does not guarantee you'll get more for it later. Lol rules are rules!

I am curious as to why there is such a large disparity in how a true cap rate is determined?

Do you guys have a ROT to determine your exit strategy for new constructions?